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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
---|---|---|---|---|---|
Icg Enterprise Trust Plc | LSE:ICGT | London | Ordinary Share | GB0003292009 | ORD 10P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-10.00 | -0.83% | 1,188.00 | 1,190.00 | 1,196.00 | 1,204.00 | 1,188.00 | 1,204.00 | 88,767 | 16:35:03 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
Trust,ex Ed,religious,charty | 187.81M | 164.53M | 2.4421 | 4.90 | 805.74M |
TIDMICGT 4 October 2018 ICG ENTERPRISE TRUST PLC UNAUDITED INTERIM RESULTS FOR THE SIX MONTHSED 31 JULY 2018 PROFIT GROWTH AND EXIT ACTIVITY CONTINUES TO DRIVE STRONG PERFORMANCE -- NAV per share of 1,026p - total return of 8.1% in the six months -- Well ahead of the FTSE-All Share, which returned 5.0% -- Strong underlying profit growth and realisations at significant uplifts -- 7.9% constant currency return on the investment Portfolio; 10.4% return in Sterling -- 14% aggregate LTM1 earnings growth from largest 30 Companies; 47% of the portfolio -- Realisations at 31% uplift; 2.3x multiple of cost -- Highly cash generative Portfolio - GBP85m of proceeds received -- Continued focus on deploying capital into highly defensive businesses -- GBP76m of new investments made; 61% of capital deployed into high conviction assets of ICG funds, co-investments and secondary fund investments -- Four co-investments and one secondary investment completed -- High conviction investments now 44% of the Portfolio; weighted towards largest 30 Companies -- Six new primary commitments -- GBP102m of new commitments to six funds -- Two new US relationships - The Jordan Company and Tailwind Capital -- Strategic benefits of the scale and resources of ICG's global platform continue to add significant value -- GBP20m of co-investment alongside ICG; ICG managed investments represent 22% of the Portfolio -- Proprietary opportunities sourced through the ICG network are proving to be particularly attractive -- Portfolio more geographically diverse; US exposure 24% of the Portfolio -- Portfolio well-positioned to continue to generate significant shareholder value -- High quality Portfolio with strong underlying profit growth -- Weighted towards companies that primarily have non-cyclical growth drivers -- Attractive and well-balanced maturity; balancing near term realisation prospects and medium-longer term growth -- Quarterly dividend of 5p per share -- Total dividends for Q1 and Q2 of 10p per share -- Continued short, medium and long-term outperformance of public markets Performance to 31 July 2018 6 months 1 year 3 year 5 year 10(2) year --------------- -------------- --------- --------- --------- ---------- Net asset value per share (total return) +8.1% +11.9% +55.4% +66.8% +126.4% Share price (total return) +5.5% +17.3% +55.4% +97.3% +142.2% FTSE All-Share Index (total return) +5.0% +9.2% +30.2% +44.9% +113.9% Emma Osborne, ICG, commented: "The Portfolio continues to deliver, with underlying profit growth and realisation activity driving strong returns. As our managers continue to take advantage of the favourable environment to sell companies, we remain disciplined and selective when deploying capital, focusing on defensive companies in sectors with non-cyclical growth drivers, such as education and healthcare. "We have a high quality Portfolio, a strong pipeline of opportunities and we believe the Portfolio is well-positioned to continue to generate significant shareholder value." Enquiries Analyst / Investor enquiries: Emma Osborne, Portfolio Manager, ICG +44 (0) 20 3201 7700 Ian Stanlake, Head of Finance and Investor Relations, ICG +44 (0) 20 3201 7700 Media Alicia Wyllie, Co-Head of Corporate Communications, ICG +44 (0) 20 3201 7917 Vikki Kosmalska, Associate Partner, Maitland AMO +44 (0) 20 7379 5151 Financials Six months to/as at 12 months to/as at 31 July 2018 31 January 2018 NAV per share 1,026p 959p NAV total return 8.1% 12.5% Sterling return on investment Portfolio 10.4% 15.3% Constant currency return on investment Portfolio 7.9% 16.4% Realisations GBP85m GBP227m Cash proceeds as a % of opening portfolio value 14% 37% Realisations -- uplift to carrying value 31% 40% Realisations -- multiple of cost 2.3x 2.7x Capital deployed GBP76m GBP142m % of Capital deployed into high conviction companies 61% 42% High conviction investments as a % of the Portfolio 44% 42% New primary fund commitments GBP102m GBP110m Dividend 10p 21p Notes We assess performance using a variety of measures that are not specifically defined under IFRS and are therefore termed as Alternative Performance Measures ("APMs"). APMs have been used if considered by the Board and the Manager to be the most relevant basis for shareholders in assessing the overall performance of the Company, and for comparing the performance of the Company to its peers and its previously reported results. The Portfolio is an APM and is defined as the aggregate of the investment portfolios of the Company and of its subsidiary limited partnerships. The Glossary includes further details of APMs and reconciliations to IFRS measures, where appropriate. The rationale for the APMs is discussed in detail in the Manager's Review. In the Chairman's Foreword, Manager's Review and Supplementary Information, all performance figures are stated on a total return basis (i.e. including the effect of re-invested dividends). ICG Alternative Investment Limited, a regulated subsidiary of Intermediate Capital Group plc, acts as the Manager of the Company. Disclaimer This report may contain forward looking statements. These statements have been made by the Directors in good faith based on the information available to them up to the time of their approval of this report and should be treated with caution due to the inherent uncertainties, including both economic and business risk factors, underlying such forward looking information. These written materials are not an offer of securities for sale in the United States. Securities may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended, or an exemption therefrom. The issuer has not and does not intend to register any securities under the US Securities Act of 1933, as amended, and does not intend to offer any securities to the public in the United States. No money, securities or other consideration from any person inside the United States is being solicited and, if sent in response to the information contained in these written materials, will not be accepted. This report contains information which, prior to this announcement, was inside information. Chairman's Foreword(3) I am delighted to report another period of strong performance, with net assets increasing from GBP664m to GBP711m or 1,026p per share, a total return of 8.1% over the six months(4) , well ahead of the FTSE All-Share, which returned 5.0%. Our high-quality Portfolio continues to deliver strong underlying profit growth and realisations at significant uplifts. The Portfolio remains highly cash generative, with GBP85m of proceeds received in the six months. In an environment of increasing geopolitical uncertainty and where pricing for new investments is high, the investment team remain cautious in deploying capital, focusing on high quality defensive businesses. New investments totalled GBP76m with 61% of capital deployed into high conviction companies, taking advantage of third party co-investment opportunities and the proprietary deal flow from ICG. We know that a reliable source of income is an important consideration for shareholders so last year we committed to a progressive annual dividend policy and quarterly payments. In line with this policy, a quarterly dividend of 5p was paid on 7 September 2018 and a further quarterly dividend of 5p will be paid on 7 December 2018. We continue to make progress against our strategic goals, benefitting from the scale and resources of ICG's global platform. Our differentiated portfolio and highly selective investment approach have created significant shareholder value over multiple cycles. Both the share price and NAV growth continue to outperform the FTSE All-share over the short, medium and long term and we believe your Company is well positioned to continue to deliver strong returns for shareholders. Jeremy Tigue Chairman 3 October 2018 Manager's Review Strategy overview Our strategy balances high conviction investments with a diversified portfolio of third party funds We focus on the buyout segment of the private equity market, in which target companies are almost invariably established, profitable and cash generative, which we believe will generate the most consistently strong returns. We invest in companies managed by ICG and other leading private equity managers, in both cases through specialist funds as well as directly. This approach allows us to proactively increase exposure to companies that we have a high conviction will outperform, enabling us to strike
the right balance between concentration and diversification. While diversification at both the manager and company level reduces risk, concentration in our high conviction investments enhances returns and allows individual winners to make a difference to performance. Portfolio of leading private equity funds provides a base of strong diversified returns Our third-party funds portfolio makes up 56% of the Portfolio and underpins our strategy providing a base of strong diversified returns and deal flow for the third-party direct co-investments and secondary investments in our high conviction portfolio. The underlying funds have a bias to mid-market and large-cap European and US private equity managers and over the last five years this portfolio has generated a constant currency return of 13% p.a. High conviction portfolio of actively sourced investments enhance returns Our high conviction portfolio includes investments managed directly by the four ICG investment teams that we partner with as well as our third party co-investments and secondary funds. The common theme in our high conviction portfolio is that we have selected the underlying companies and this approach is in contrast to a conventional fund of funds in which the third party managers make all the underlying investment decisions. Our high conviction portfolio is weighted towards investments in our 30 largest underlying companies and has generated a constant currency return of 18% p.a. over the last five years. We have a strategic goal of increasing the weighting to these investments to 50% - 60% of the Portfolio. Portfolio overview The Portfolio has investments in 84 funds, managed by 38 leading private equity managers and at 31 July 2018, was valued at GBP654m (31 Jan 18: GBP601m), of which third party funds were valued at GBP367m of the Portfolio (31 Jan 18: GBP349m), with high conviction investments valued at GBP287m (31 Jan 18: GBP252m). 31 July 2018 31 January 2018 Investment category % of portfolio % of portfolio ------------------------------------ -------------- --------------- High conviction investments ICG managed investments 22 18 Third party co-investments 17 17 Third party secondary investments 5 7 Total High conviction investments 44 42 Third party funds' portfolio Graphite Capital primary funds 14 15 Third party primary funds 42 43 Total diversified fund investments 56 58 ------------------------------------ -------------- --------------- Total 100 100 ------------------------------------- -------------- --------------- Performance overview Operating performance and realisation activity continue to drive strong returns Strong operating performance and realisations at significant uplifts to carrying value have generated a constant currency return of 7.9% during the six months, or 10.4% in Sterling, further extending the average 14.8% p.a. constant currency growth that the Portfolio has generated over the last five years. Almost a quarter of the underlying Portfolio gain in the six months came from exit activity. Six months Year ended Movement in the portfolio to 31 July 31 January GBPm 2018 2018 ------------------------------------------------------ --- Opening Portfolio* 600.7 594.4 Third-party funds portfolio drawdowns 29.8 82.3 High conviction investments -- ICG funds, secondary investments and co-investments 46.7 59.6 Total new investment 76.5 141.9 Realisation Proceeds (84.9) (226.6) Net cash (inflow)/outflow (8.4) (84.7) Underlying Valuation Movement** 47.5 97.7 Currency movement 14.7 (6.7) Closing Portfolio* 654.5 600.7 -------- -------- % underlying Portfolio growth (local currency) 7.9% 16.4% % currency movement 2.5% (1.1%) % underlying Portfolio growth (Sterling) 10.4% 15.3% * Refer to the Glossary for reconciliation to the portfolio balance presented in the unaudited results. ** 94% of the Portfolio is valued using 30 June 2018 (or later) valuations (31 Jan 18: 94%). High quality portfolio with top 30 companies reporting double digit earnings and revenue growth Our largest 30 underlying companies, which represent 47% of the Portfolio by value (31 Jan 18: 47%) and are dominated by our high conviction companies, continue to perform well, reporting aggregate LTM earnings growth of 14% and revenue growth of 13%. It is particularly encouraging that around a third of these companies are generating LTM earnings growth in excess of 20%, driven by both organic growth and M&A activity. Over the six months, valuation multiples increased marginally to 10.8x from 10.6x, a reflection of the change of mix and weightings in the largest 30 underlying companies rather than an increase in aggregate multiples overall. The net debt/EBITDA ratio has fallen marginally from 4.2x to 4.0x. As we look across the Portfolio, the growth and valuation trends are similar. Realisation activity(5) Continued strong realisation activity at significant uplifts to carrying value and cost The Portfolio remains highly cash generative. After record realisations in the year to 31 January 2018, our underlying managers continued to take advantage of the favourable exit environment generating proceeds of GBP85m, or 14% of the opening Portfolio value, in the six months to 31 July 2018. The sales of 34 companies were completed at an average uplift of 31%(6) to the previous carrying value, which is broadly in line with the average uplift over the preceding five years. The average return multiple of 2.3x cost was in-line with the average of 2.2x(7) over the last five financial years, reflecting a number of highly successful investments realised in the period with almost half by number being sold for more than 2.5x cost. Four of the largest 30 underlying companies were realised: The Laine Pub Company and Swiss Education Group, high conviction co-investments managed by Graphite Capital and Invision Capital respectively, as well as CeramTec and TMF from our third party funds portfolio, including a secondary investment in the latter company. New investment activity Selective investment into high conviction opportunities We continue to be selective in our investment approach and, with a focus on the highest quality defensive businesses, we completed four co-investments and one small secondary in the six months. These, together with investments made by ICG funds, drove high conviction investments to 61% of the GBP76m of capital deployed, up from 42% in the year to January 2018. This increase in high conviction investments was primarily driven by an increase in investments sourced through the ICG network which accounted for 46% of new investment, as the strategic benefits of the move to ICG in 2016 continue to add value. The larger investments made in the period were: -- Minimax (a global provider of fire protection systems and services), alongside ICG Europe, in which we invested GBP12m. ICG has a 12 year history with this business and is the sole institutional equity provider in the most recent management buyout transaction. -- PSB Academy (one of the largest tertiary education institutions in Asia) alongside ICG Asia Pacific, in which we co-invested GBP7m, increasing our total investment in this company to GBP8m. -- Endeavor Schools (a US schools operator) alongside education investment specialist Leeds Private Equity, in which we invested GBP8m. -- Abode Healthcare (a provider of hospice and home health services in the US), GBP5m investment alongside US mid-market manager Tailwind Capital. All of these businesses have highly defensive business models, with demonstrated resilience to economic cycles and high cash flow conversion, as well as strong growth drivers and clear value creation plans. Additionally, the two ICG co-investments feature a combination of subordinated debt and equity investments giving an element of structural downside protection. On a blended basis these investments are targeting returns in line with our usual equity investments, but the subordinated debt element significantly reduces the overall risk. This is a feature of the vast majority of our investments with both the ICG Europe and ICG Asia Pacific strategies. Six new commitments to both existing and new manager relationships We completed four new third party fund commitments and committed to two ICG managed funds resulting in a total of GBP102m(8) of new primary fund commitments in the six months. Of the four new third party fund commitments, two are to European managers we have invested with for many years (Graphite Capital (GBP30m) and Bain Capital Europe (EUR8m)), and two new US managers were added to the Portfolio (The Jordan Company and
Tailwind Capital). The commitment to Graphite IX continues our strong relationship with our former manager, Graphite Capital. The fund builds on Graphite's more than 30 year successful track record of investing in mid-market buyouts in the UK, and held a final close at GBP470m which was in line with both its target and the predecessor fund. ICG's latest European fund, ICG Europe VII, closed EUR3.7bn of commitments in May 2018. This strategy invests in subordinated debt and equity in European buyouts, usually with ICG as the sole institutional investor. The fund targets gross annualised returns of 15%-20% with low downside risk and its first investment, Minimax, was also a co-investment in the six months. We have invested successfully in this strategy for almost 30 years and our EUR40m commitment to ICG Europe VII takes the total exposure to this strategy to GBP143m (including undrawn commitments). We also committed $10m to the latest ICG US mezzanine fund, North American Private Debt II, which raised $1.35bn. This fund invests in subordinated debt and equity of US private equity-backed mid-market companies, targeting gross annualised returns of 13%-17% with low downside risk. The commitment is consistent with two of our strategic objectives of increasing exposure to the US market and to in-house strategies that fit our investment criteria. We also expect it to broaden and deepen our US middle market third-party manager relationships. Commitments to The Jordan Company and Tailwind Capital, of $15m each, further increase our focus on the US mid-market. Both of these managers have long track records of investing and adding value through cycles. Tailwind has already generated an attractive co-investment in Abode Healthcare and we expect both funds will generate additional high conviction investments. Portfolio analysis(9) Focus on mid-market and large companies The Portfolio is biased towards the mid-market (48%) and large deals (44%), which we view as more defensive than smaller deals, benefiting from experienced management teams and often leading market positions. Portfolio becoming more geographically diverse The Portfolio is focused on developed private equity markets: primarily continental Europe (40%), the UK (32%) and the US (24%), with almost no emerging markets exposure. In line with one of our strategic objectives, our weighting to the US has increased from 14% at the time of the move to ICG in 2016 and we have a target to increase the US focus to 30% -- 40% of the Portfolio. Over the same period, the UK bias has reduced from 45%. We expect both of these trends to gather pace as the benefits of being part of ICG's global alternative asset manager platform are further realised. Sector bias towards sectors with non-cyclical growth drivers The Portfolio is weighted towards sectors that primarily have non-cyclical growth drivers, such as demographics, with 24% of the Portfolio invested in healthcare and education and 15% in business services. The remainder of the portfolio is broadly spread across the industrial (19%), consumer goods and services (15%), leisure (10%) and TMT (10%) sectors. Attractive and well-balanced vintage year exposure The Portfolio's maturity profile balances near-term realisation prospects with a strong pipeline of medium to longer-term growth. Investments completed in 2014 or earlier, which are more likely to generate gains from realisations in the shorter-term, represent 37% of the Portfolio. Against this, 63% of value is in investments made in 2015 or later, providing the Portfolio with medium to longer term growth potential as value created within these businesses translates into gains. Balance sheet and financing Strong balance sheet and positive financing outlook With the portfolio generating a net cash inflow of GBP8m, and after allowing for dividends and expenses, cash fell marginally from GBP78m to GBP72m in the half year. Undrawn commitments of GBP394m provide the Company with a robust medium-term investment pipeline. With total liquidity of GBP177m, including the undrawn bank facility, commitments therefore exceeded liquidity by 30% of net asset value. GBPm 31 July 2018 31 Jan 2018 ----------------------------------------------- -------------- ------------- Portfolio* 654 601 Cash 72 78 Net obligations* (15) (15) ----------------------------------------------- Net assets 711 664 ----------------------------------------------- * Refer to the Glossary for reconciliation to the portfolio balance presented in the unaudited results and definition of net obligations. Outstanding commitments 394 321 Total available liquidity (including facility) (177) (182) Overcommitment (including facility) 217 139 Overcommitment % of net asset value 30% 21% Commitments are typically drawn down over a period of four to five years with approximately 10%--15% retained at the end of the investment period to fund follow-on investments and expenses. If outstanding commitments were to follow a linear investment pace to the end of their respective remaining investment periods, we estimate that approximately GBP90m would be called over the next 12 months. This leaves significant available capital for high conviction investments over and above those that will be made by our underlying funds. In managing the Company's balance sheet our objective is to be broadly fully invested through the cycle while ensuring that we have sufficient liquidity to be able to take advantage of attractive investment opportunities as they arise. We do not intend to be geared other than, potentially, for short-term working capital purposes. Outlook Continued investment activity and a strong pipeline of new opportunities Since the period end, the Portfolio has continued to benefit from the favourable exit environment, with GBP19m of proceeds received in the two months to 30 September 2018. Against this, we have paid GBP16m of capital calls and completed a GBP12m secondary in Jordan Resolute Fund II. We have a strong pipeline of further opportunities for the remainder of the year, both new funds and high conviction investments. Portfolio well positioned to generate significant shareholder value We have a high quality Portfolio with strong underlying profit growth and realisation activity continuing to drive performance. Against the current backdrop of high valuations for new investments and continuing geopolitical uncertainties, we remain cautious in re-deploying cash generated by the Portfolio. Our flexible mandate allows us to adapt the mix of new investment to evolving market conditions and where we see the best relative value. The proprietary opportunities sourced through the ICG network are proving to be particularly attractive and these are becoming a more significant part of the portfolio. We believe the Portfolio is well positioned to continue to generate shareholder value. ICG Private Equity Funds Investment Team Principal risks and uncertainties The principal risks and uncertainties associated with the Company's business can be divided into the following areas: -- Investment performance; -- Valuation; -- Political and macroeconomic uncertainty; -- Private equity sector; -- Regulatory, legislative and taxation compliance; -- People; -- The Manager and other third party advisers; -- Information security; -- Foreign exchange; and -- Financing. The principal risks and uncertainties facing the Company for the second half of the financial year are substantially the same as those disclosed in the Strategic Report and in the notes to the Financial Statements in the Company's latest Annual Report for the year ended 31 January 2018. Supplementary information This section presents unaudited supplementary information regarding the Portfolio (see Manager's Review and the Glossary for further details and definitions). The 30 largest underlying companies The table below presents the 30 companies in which ICG Enterprise had the largest investments by value at 31 July 2018. These investments may be held directly or through funds, or in some cases in both ways. The valuations are gross and are shown as a percentage of the total investment Portfolio. Year of Value as a % Company Manager investment Country of Portfolio ------------------------------------------------------------ --------------- ----------- ------------ -------------- 1 DomusVi+ Operator of retirement homes ICG 2017 France 3.2% 2 City & County Healthcare Group Graphite Provider of home care services Capital 2013 UK 3.2% 3 Visma+ Provider of accounting software and accounting outsourcing services Cinven & ICG 2014 & 2017 Europe 2.6% 4 Minimax+^ Supplier of fire protection systems and services ICG 2018 Germany 2.5% 5 David Lloyd Leisure+ Operator of premium health clubs TDR Capital 2013 UK 2.3% 6 Roompot+
Operator and developer of holiday parks PAI Partners 2016 Netherlands 2.0% 7 Froneri+^ Manufacturer and distributor of ice cream products PAI Partners 2013 UK 1.9% 8 nGAGE Graphite Provider of recruitment services Capital 2014 UK 1.9% 9 Ceridian+ Thomas H Lee Provider of payment processing services Partners 2007 USA 1.8% 10 Education Personnel+^ Provider of temporary staff for the education sector ICG 2014 UK 1.8% 11 Gerflor^ Manufacturer of vinyl flooring ICG 2011 France 1.8% 12 Yudo+ Designer and manufacturer of hot runner systems ICG 2018 South Korea 1.6% 13 ICR Group Provider of repair and maintenance services to the Graphite energy industry Capital 2014 UK 1.6% 14 PetSmart+ Retailer of pet products and services BC Partners 2015 USA 1.6% 15 Cambium^ Provider of educational solutions and services ICG 2016 USA 1.6% 16 System One+ Thomas H Lee Provider of specialty workforce solutions Partners 2016 USA 1.5% 17 Frontier Medical+ Manufacturer of medical devices Kester Capital 2013 UK 1.5% 18 Beck & Pollitzer Provider of industrial machinery installation and Graphite relocation Capital 2016 UK 1.5% 19 Skillsoft+ Provider of off the shelf e-learning content Charterhouse 2014 USA 1.4% 20 PSB Academy+ Provider of private tertiary education ICG 2018 Singapore 1.3% 21 Endeavor Schools+ Leeds Equity Operator of schools Partners 2018 USA 1.2% 22 YSC Provider of leadership consulting and management assessment Graphite services Capital 2017 UK 1.0% 23 New World Trading Company Graphite Operator of distinctive pub restaurants Capital 2016 UK 1.0% 24 U-POL^ Manufacturer and distributor of automotive refinishing Graphite products Capital 2010 UK 0.9% 25 Cognito+ Graphite Supplier of communications equipment, software & services Capital 2002 UK 0.9% 26 Compass Community Provider of fostering services and children residential Graphite care Capital 2017 UK 0.8% 27 Abode Healthcare+ Tailwind Provider of hospice and healthcare Capital 2018 USA 0.8% 28 Random42 Graphite Provider of medical animation and digital media services Capital 2017 UK 0.8% 29 Odgers+ Graphite Provider of recruitment services Capital 2009 UK 0.6% 30 Syneos Health Advent/Thomas H Lee Provider of commercial solutions for healthcare companies Partners 2016 USA 0.6% ------------------------------------------------------------- -------------- ---------------- Total of the 30 largest underlying investments 47.2% ------------------------------------------------------------- ------------------------------------------- All or part of this investment is held directly as a co-investment or other direct investment. ^ All or part of this investment was acquired as part of a secondary purchase. The 30 largest fund investments The table below presents the 30 largest funds by value at 31 July 2018. The valuations are net of any carried interest provision. Outstanding Value commitment Fund Year of commitment Country/ region GBPm GBPm ------------------------- ------------------- ------------------- --------- ----------- 1 Graphite Capital Partners VIII * Mid-market buyouts 2013 UK 78.7 26.6 2 ICG Europe VI ** Mezzanine and equity in mid-market buyouts 2015 Europe 24.7 2.3 3 BC European Capital IX ** Large buyouts 2011 Europe/USA 19.7 0.7 4 CVC European Equity Partners VI Large buyouts 2013 Europe/USA 15.2 2.3 5 One Equity Partners VI Mid-market buyouts 2016 USA/Europe 13.6 0.6 6 CVC European Equity Partners V ** Large buyouts 2008 Europe/USA 13.4 0.5 7 ICG Strategic Secondaries Fund II Secondary fund recapitalisations 2016 USA/Europe 13.2 12.8 8 PAI Europe VI Mid-market and large buyouts 2013 Europe 13.1 3.4 9 Graphite Capital Partners VII * / ** Mid-market buyouts 2007 UK 12.5 4.7 10 Activa Capital Fund III Mid-market buyouts 2013 France 11.5 3.9 11 Fifth Cinven Fund Large buyouts 2012 Europe 11.3 1.2 12 ICG Velocity Partners Co-Investor ** Mid-market buyouts 2016 USA 11.0 0.9 Thomas H Lee Equity Fund 13 VII Mid-market and large buyouts 2015 USA 10.3 5.2 14 Permira V Large buyouts 2013 Europe/USA 10.2 1.4 Nordic Capital Partners 15 VIII Mid-market and large buyouts 2013 Europe 9.9 1.6 16 IK VII Mid-market buyouts 2013 Europe 8.8 0.4 17 ICG Asia Pacific Fund III Mezzanine and equity in mid-market buyouts 2016 Asia Pacific 8.4 4.5 18 ICG Europe V ** Mezzanine and equity in mid-market buyouts 2012 Europe 8.4 0.9 19 Hollyport Secondary Opportunities V Tail-end secondary portfolios 2015 Global 8.2 2.3 Bowmark Capital Partners 20 V Mid-market buyouts 2013 UK 8.0 1.9 21 Thomas H Lee Parallel Fund VI Mid and large buyouts 2007 USA 7.9 1.0 22 Deutsche Beteiligungs Fund VI Mid-market buyouts 2012 Germany 7.9 1.0 23 TDR Capital III Mid-market and large buyouts 2013 Europe 7.8 3.1 24 Gridiron Capital Fund III Mid-market buyouts 2016 USA 7.4 5.7 Egeria Private Equity 25 Fund IV Mid-market buyouts 2012 Netherlands 7.3 0.5 Bowmark Capital Partners 26 IV Mid-market buyouts 2007 UK 7.1 0.0 27 Advent Global Private Equity VIII Large buyouts 2016 Europe/USA 6.9 6.8 ICG European Fund 2006 B 28 ** Mezzanine and equity in mid-market buyouts 2014 Europe 6.3 2.2 29 Bain Capital Europe IV Mid-market buyouts 2014 Europe 5.7 2.8 30 Silverfleet II Mid-market buyouts 2014 Europe 5.6 6.9 Total of the largest 30 fund investments 380.0 108.1 Percentage of total investment Portfolio 58.1%
-------------------------- --------------------------------------- ----------- * Includes the associated Top Up funds. ** All or part of an interest acquired through a secondary fund purchase. Portfolio analysis Closing Portfolio by value at 31 July 2018 31 July 31 January 2018 2018 % of value of % of value of underlying underlying Portfolio by investment type investments investments ----------------------------- ---------------- ---------------- Mid-market buyouts 48.4% 48.1% Large buyouts 43.8% 42.4% Small buyouts 4.7% 8.2% Other 3.1% 1.3% ------------------------------ Total 100.0% 100.0% ------------------------------ Portfolio by 31 July 31 January calendar year 2018 2018 of investment % of value of underlying investments % of value of underlying investments -------------- ------ 2018 11.8% 2.1% 2017 20.1% 19.3% 2016 19.6% 20.9% 2015 11.3% 12.9% 2014 14.2% 17.8% 2013 11.4% 12.4% 2012 2.9% 3.3% 2011 2.0% 2.4% 2010 2.0% 2.2% 2009 1.1% 1.2% 2008 0.4% 2.1% 2007 2.0% 1.3% 2006 and before 1.2% 2.1% ----------------------- Total 100.0% 100.0% ----------------------- 31 July 31 January Portfolio by 2018 2018 sector % of value of underlying investments % of value of underlying investments ---------------- --------------------------------------- --------------------------------------- Healthcare and education 23.5% 22.4% Industrials 19.4% 17.4% Business services 14.8% 15.6% Consumer goods and services 14.8% 14.7% Leisure 10.4% 12.1% TMT 9.6% 10.2% Financials 4.9% 4.9% Other 2.6% 2.7% Total 100.0% 100.0% ----------------- --------------------- --------------- --------------------- --------------- 31 July 31 January 2018 2018 % of value of % of value of Portfolio by geographic distribution based on location underlying underlying of company headquarters investments investments Europe 39.7% 40.0% UK 32.0% 35.2% North America 24.0% 21.8% Rest of world 4.3% 3.0% ------------------------------------------------------- Total 100.0% 100.0% ------------------------------------------------------- Commitments analysis The following tables analyse commitments at 31 July 2018. Original commitments are translated at 31 July 2018 exchange rates. Total undrawn commitments Original Outstanding Average commitment commitment drawdown % of GBP'000 GBP'000 percentage commitments --------------------- ----------- ----------- ------------- -------------- Investment period not commenced 30,000 30,000 0.0% 7.6% Funds in investment period 545,165 307,269 43.6% 78.0% Funds post investment period 732,667 56,719 92.3% 14.4% --------------------- ----------- ----------- Total 1,307,832 393,988 69.9% 100.0% --------------------- ----------- ----------- Movement in outstanding commitments in 6 months ended 31 July 2018 GBPm --------------------------------------------------------- --------- As at 1 February 2018 321.2 New primary commitments 101.7 New commitments relating to co-investments and secondary purchases 1.6 Drawdowns (42.7) Currency and other movements 12.2 --------------------------------------------------------- As at 31 July 2018 394.0 --------------------------------------------------------- New commitments during the six months to 31 July 2018 Fund Strategy Geography GBPm --------------------------- ---------------------------- -------------- ----- Primary commitments Bain V Mid-market buyouts Europe 7.0 Graphite IX Mid-market buyouts UK 30.0 ICG Europe Fund VII Mid-market buyouts Europe 34.6 ICG North American Private Subordinated debt and Debt Fund II mezzanine North America 7.4 Resolute IV Mid-market buyouts USA 11.4 Tailwind III Mid-market buyouts USA 11.3 ----- Total primary commitments 101.7 Commitments relating to co-investments and secondary investments 1.6 Total new commitments 103.3 ===== 31 July 31 July 31 January 31 January 2018 2018 2018 2018 Outstanding commitments GBPm % GBPm % ------------------------- ------- ------- ---------- ---------- -- Sterling 89.5 22.7 63.2 19.7 -- Euro 194.0 49.2 170.0 52.9 -- US Dollar 108.6 27.6 86.1 26.8 -- Other European 1.9 0.5 1.9 0.6 ------------------------- ------- ------- ---------- ---------- Total 394.0 100.0 321.2 100.0 ------------------------- ------- ------- ---------- ---------- Currency exposure 31 July 31 July 31 January 31 January 2018 2018 2018 2018 Portfolio(1) GBPm % GBPm % ----------------- -------- -------- ---------- ---------- Sterling 237.7 36.4 235.8 39.3 Euro 185.5 28.3 174.3 29.0 US Dollar 150.8 23.0 119.6 19.9 Other European 48.4 7.4 49.8 8.3 Other 32.1 4.9 21.2 3.5 ----------------- -------- -------- ---------- ---------- Total 654.5 100.0 600.7 100.0 ----------------- -------- -------- ---------- ---------- (1) Currency exposure is calculated by reference to the location of the underlying Portfolio companies' headquarters. Realisation and new investment activity Largest underlying realisations in the six months to 31 July 2018 ---------------------------------------------------------------------------- Year of Realisation Investment Manager investment type Proceeds GBPm ------------- ------------- ------------- -------------- ------------- The Laine Pub Graphite
Company Capital 2014 Trade 10.7 Doughty Financial TMF Hanson 2008 buyer 8.3 Swiss Invision Financial Education Capital 2015 buyer 6.5 Corporate Risk Holdings ICG 2017 Trade 4.0 Financial CeramTec Cinven 2013 buyer 3.8 Sky Betting and Gaming CVC 2015 Trade 3.7 Financial Ufinet Cinven 2014 buyer 3.2 Financial Royal Sanders Egeria 2015 buyer 2.8 Financial Intervias TDR Capital 2014 buyer 2.7 Infobase Financial Publishing ICG 2016 buyer 2.3 Total of 10 largest underlying realisations 48.0 Total realisations 84.9 Largest underlying new investments in the six months to 31 July 2018 ------------------------------------------------------------------------ Investment Description Manager Country Cost* GBPm Provider of fire protection systems and Minimax services ICG Germany 12.2 Endeavour Operator of Schools schools Leeds Equity USA 8.1 Operator of tertiary PSB education Academy** institutions ICG Singapore **6.8 Abode Provider of Tailwind Healthcare hospice care Capital USA 5.2 Provider of waste collection and environmental GFL services BC Partners Canada 1.5 Distributor of gas and Naturgy electricity CVC Spain 1.4 Provider of drinks bottling Refresco services PAI Partners Netherlands 1.4 Provider of personal protective and road safety RSEA equipment ICG Australia 1.3 Provider of car insurance Active broking Assurances services Activa France 1.2 Provider of internet services to student Ask4 accommodation Bowmark UK 1.1 ----------- --------------- ------------- ------------- ---------- Total of 10 largest underlying new investments 40.2 ----------------------------- ------------- ------------ ------------ Total new investment 76.5 * Represents ICG's indirect exposure (share of fund cost) plus any amounts paid for co-investments in the period. ** Represents a new co-investment during the period. PSB Academy was already in the portfolio as at 31 January 2018 via a primary holding in ICG Asia Pacific III. Interim financial statements Income statement Half year to 31 July 2018 Half year to 31 July 2017 Year to 31 January 2018 (unaudited) (unaudited) (audited) Revenue Capital Revenue Capital Revenue Capital return return Total return return Total return return Total Notes GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ------------- ----- ------------ -------- -------- ------------ -------- -------- ---------- ---------- ---------- Investment returns Income, gains and losses on investments 5,746 52,121 57,867 16,536 38,588 55,124 22,257 60,124 82,381 Deposit interest 65 - 65 22 - 22 59 -- 59 Other income 2 - 2 - - - 70 -- 70 Foreign exchange gains and losses - 1,364 1,364 - 1,194 1,194 -- 826 826 5,813 53,485 59,298 16,558 39,782 56,340 22,386 60,950 83,336 Expenses Investment management charges 8 (958) (2,872) (3,830) (899) (2,697) (3,596) (1,791) (5,374) (7,165) Other expenses (1,051) (516) (1,567) (1,042) (541) (1,583) (1,659) (1,075) (2,734) (2,009) (3,388) (5,397) (1,941) (3,238) (5,179) (3,450) (6,449) (9,899) Profit before tax 3,804 50,097 53,901 14,617 36,544 51,161 18,936 54,501 73,437 Taxation (341) 341 - (2,086) 2,086 - (2,435) 2,294 (141) Profit for the period 3,463 50,438 53,901 12,531 38,630 51,161 16,501 56,795 73,296 Attributable to: ------------ -------- -------- ------------ -------- -------- ---------- ---------- ---------- Equity shareholders 3,463 50,438 53,901 12,531 38,630 51,161 16,501 56,795 73,296 Basic and diluted earnings per share 77.82p 73.52p 105.56p The columns headed 'Total' represent the income statement for the relevant financial years and the columns headed 'Revenue return' and 'Capital return' are supplementary information, in line with the Statement of Recommended Practice for Financial Statements of Investment Trust Companies and Venture Capital Trusts issued by the Association of Investment Companies. There is no Other Comprehensive Income. The notes on pages 22 to 26 form an integral part of the interim financial statements. Balance sheet 31 July 31 July 31 January 2018 2017 2018 (unaudited) (unaudited) (audited) Notes GBP'000 GBP'000 GBP'000 ------------------------------- ----- ------------ ------------ ---------- Non-current assets Investments held at fair value Unquoted investments 7 504,685 482,442 478,362 Quoted investments 7 1,719 2,475 1,733 Subsidiary investments 7 124,941 91,889 96,392 ------------ ------------ ---------- 631,345 576,806 576,487 ------------ ------------ ---------- Current assets Cash and cash equivalents 72,116 73,609 78,389 Receivables 7,985 3,276 10,410 ------------ ------------ ---------- 80,101 76,885 88,799 ------------ ------------ ---------- Current liabilities Payables 841 3,031 963 ------------ ------------ ---------- Net current assets 79,260 73,854 87,836 ------------ ------------ ---------- Total assets less current liabilities 710,605 650,660 664,323 ------------ ------------ ---------- Capital and reserves Share capital 5 7,292 7,292 7,292 Capital redemption reserve 2,112 2,112 2,112 Share premium 12,936 12,936 12,936 Capital reserve 681,176 614,109 630,738 Revenue reserve 7,089 14,211 11,245 ------------ ------------ ---------- Total equity 710,605 650,660 664,323 ------------ ------------ ---------- Net asset value per share 1,026.0p 936.7p 959.1p (basic and diluted) The interim financial statements on pages 18 to 26 were approved by the Board of Directors on 3 October 2018 and signed on its behalf by: Jeremy Tigue Director 3 October 2018 The notes on pages 22 to 26 form an integral part of the interim financial statements. Cash flow statement Half year to Half year to Year to 31 July 31 July 31 January 2018 2017 2018
(unaudited) (unaudited) (audited) GBP'000 GBP'000 GBP'000 ----------------------------- ------------ ------------ ------------- Operating activities Sale of portfolio investments 48,700 77,077 147,888 Purchase of portfolio investments (49,547) (42,242) (99,601) Interest income received from portfolio investments 3,752 12,329 15,967 Dividend income received from portfolio investments 2,023 4,185 6,230 Other income received 67 22 129 Investment management charges paid (3,673) (3,630) (7,090) Other expenses paid (847) (805) (1,456) Net cash inflow from operating activities 475 46,936 62,067 Financing activities Bank facility fee (381) (876) (1,320) Purchase of shares into treasury -- (5,207) (7,810) Equity dividends paid (7,619) (6,960) (13,896) Net cash outflow from financing activities (8,000) (13,043) (23,026) Net (decrease)/ increase in cash and cash equivalents (7,525) 33,893 39,041 Cash and cash equivalents at beginning of period 78,389 38,522 38,522 Net (decrease) / increase in cash and cash equivalents (7,525) 33,893 39,041 Effect of changes in foreign exchange rates 1,252 1,194 826 Cash and cash equivalents at end of period 72,116 73,609 78,389 The notes on pages 22 to 26 form an integral part of the interim financial statements. Statement of changes in equity Capital Total Share capital redemption reserve Share premium Capital reserve Revenue reserve shareholders' equity GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 -------------------------------- ------------- --------------------- ------------- --------------- ------------------- ---------------------------------- Half year to 31 July 2018 (unaudited) Opening balance at 1 February 2018 7,292 2,112 12,936 630,738 11,245 664,323 Profit for the period and total comprehensive income -- -- -- 50,438 3,463 53,901 Dividends paid or approved -- -- -- -- (7,619) (7,619) Closing balance at 31 July 2018 7,292 2,112 12,936 681,176 7,089 710,605 ------------- --------------------- ------------- --------------- ----------- ------ ------------------------- ------- Capital Total Share capital redemption reserve Share premium Capital reserve Revenue reserve shareholders' equity GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 -------------------------------- ----------------- ------------------- ------------- ----------------- ------------------- --- ----------------------------- Half year to 31 July 2017 (unaudited) Opening balance at 1 February 2017 7,292 2,112 12,936 581,753 8,640 612,733 Profit for the period and total comprehensive income -- -- -- 38,630 12,531 51,161 Dividends paid or approved -- -- -- -- (6,960) (6,960) Purchase of shares into treasury -- -- -- (6,274) -- (6,274) Closing balance at 31 July 2017 7,292 2,112 12,936 614,109 14,211 650,660 Capital Total Share capital redemption reserve Share premium Capital reserve Revenue reserve shareholders' equity GBP000 GBP000 GBP000 GBP000 GBP000 GBP000 -------------------------------- ----------------- ------------------- ------------- --------------- ------------------- ------------------------- Year to 31 January 2018 (audited) Opening balance at 1 February 2017 7,292 2,112 12,936 581,753 8,640 612,733 Profit for the year and total comprehensive income -- -- -- 56,795 16,501 73,296 Dividends paid or approved -- -- -- -- (13,896) (13,896) Purchase of shares into treasury -- -- -- (7,810) -- (7,810) Closing balance at 31 January 2018 7,292 2,112 12,936 630,738 11,245 664,323 ----------------- -------------------- ------------- ---------------- ------------------ ----------------- ------ The notes on pages 22 to 26 form an integral part of the interim financial statements. Notes to the financial statements (unaudited) 1) General information ICG Enterprise Trust plc ("the Company") is registered in England and Wales and domiciled in England. The registered office is Juxon House, 100 St Paul's Churchyard, London EC4M 8BU. The Company's objective is to provide shareholders with long term capital growth through investment in unquoted companies, mostly through private equity funds but also directly. 2) Unaudited interim report This interim financial report does not comprise statutory accounts within the meaning of section 434 of the Companies Act 2006. Statutory accounts for the year to 31 January 2018 were approved by the Board of Directors on 25 April 2018 and delivered to the Registrar of Companies. The report of the auditors on those accounts was unqualified, did not contain an emphasis of matter paragraph and did not contain any statements under section 498(2) or (3) of the Companies Act 2006. This financial report has not been audited. 3) Basis of preparation The Company applies International Financial Reporting Standards ("IFRSs") as adopted by the European Union and the Association of Investment Companies Statement of Recommended Practice (issued in November 2014 and updated in February 2018 with consequential amendments) in preparing its annual financial statements for the year to 31 January 2018. The interim financial report, comprising the interim financial statements has therefore been prepared in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the Financial Conduct Authority and with IAS 34 Interim Financial Reporting, as adopted by the European Union. These interim financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the annual financial statements for the year to 31 January 2018. The accounting policies applied are consistent with those as described in the annual financial statements. The Company has adopted both "IFRS 9 - Financial Instruments" and "IFRS 15 - Revenue from Contracts with Customers" from 1 February 2018 and as detailed in the annual financial statements there is no impact on the interim financial statements following the adoption of these standards. There were no new key judgments required by the directors in applying IFRS 9 and IFRS 15. The Company has considered other new and forthcoming standards (including IFRS 16 Leases which will become applicable for periods beginning on or after 1 January 2019) and determined there will be no impact on the Company. There is only one reportable segment under IFRS 8. 4) Dividends Half year to Half year to Year ended 31 July 31 July 31 January 2018 2017 2018 GBP'000 GBP'000 GBP'000 ----------------------------------------------------- ------------ ------------ -----------
Interim in respect of year ended 31 January: 5.0p (PY: 10.0p) per share 3,463 - 6,936 Final in respect of year ended 31 January: 6.0p (PY: 10.0p) per share 4,156 6,960 6,960 ------------ ------------ Total 7,619 6,960 13,896 ------------ ------------ ----------- The Company paid an interim dividend of 5p per share (totalling GBP3.463m) in September 2018 in respect of the quarter to 30 April 2018. The Board has approved a further interim dividend for the quarter to 31 July 2018 of 5p per share (totalling GBP3.463m) which will be paid on 7 December 2018 to shareholders on the register on 16 November 2018. 5) Share capital At 31 July 2018, 72,913,000 shares had been allocated, called up and fully paid. Of this total, the Company held 3,650,945 shares in treasury (31 July 2017: 3,450,945 and 31 January 2018: 3,650,945) leaving 69,262,055 (31 July 2017: 69,462,055 and 31 January 2018: 69,262,055) shares outstanding, all of which have equal voting rights. Notes to the financial statements (unaudited) 6) Earnings per share Half year to Half year to Year ended 31 July 31 July 2018 2017 31 January 2018 -------------------------- ------------ ------------ --------------- Revenue return per ordinary share 5.00p 18.01p 23.76p Capital return per ordinary share 72.82p 55.51p 81.80p Earnings per ordinary share (basic and diluted) 77.82p 73.52p 105.56p Weighted average number of shares 69,262,055 69,585,722 69,435,737 The earnings per share figures are based on the weighted average numbers of shares set out above. 7) Fair Values estimation IFRS 7 requires disclosure of fair value measurements of financial instruments categorised according to the following fair value measurement hierarchy: -- Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). -- Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly (that is, derived from prices) (level 2). -- Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3). The valuation techniques applied to level 1 and level 3 assets are described in note 1 of the annual financial statements. No investments were categorised as level 2. The following tables present the assets that are measured at fair value. The Company had no financial liabilities measured at fair value at these dates. Level 1 Level 2 Level 3 Total 31 July 2018 GBP'000 GBP'000 GBP'000 GBP'000 ---------------------------------- ------- ------- ------- ------- Investments held at fair value Unquoted investments -- indirect -- -- 393,539 393,539 Unquoted investments -- direct -- -- 111,146 111,146 Quoted investments -- direct 1,719 -- -- 1,719 Subsidiary undertakings -- -- 124,941 124,941 ------- Total investments held at fair value 1,719 -- 629,626 631,345 ------- ------- ------- ------- Level 1 Level 2 Level 3 Total 31 July 2017 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------------ ------- ------- ------- ------- Investments held at fair value Unquoted investments -- indirect -- -- 370,079 370,079 Unquoted investments -- direct -- -- 112,363 112,363 Quoted investments -- direct 2,475 -- -- 2,475 Subsidiary undertakings -- -- 91,889 91,889 Total investments held at fair value 2,475 -- 574,331 576,806 ------- ------- ------- ------- Notes to the financial statements (unaudited) 7) Fair Values estimation (continued) Level 1 Level 2 Level 3 Total 31 January 2018 GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------------ ------- ------- ------- ------- Investments held at fair value Unquoted investments -- indirect -- -- 379,921 379,921 Unquoted investments -- direct -- -- 98,441 98,441 Quoted investments -- direct 1,733 -- -- 1,733 Subsidiary undertakings -- -- 96,392 96,392 Total investments held at fair value 1,733 -- 574,754 576,487 ------- ------- ------- ------- All unquoted and quoted investments are valued at fair value in accordance with IFRS 13. The following tables present the changes in level 3 instruments. Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary profit or loss profit or loss undertakings Total Six months to 31 July 2018 (unaudited) GBP'000 GBP'000 GBP'000 GBP'000 ---------------------------------------------------- ------------------------------------------------------- ----------------------------------------------------- ------------ ---------- Opening balance at 1 February 2018 379,921 98,441 96,392 574,754 Additions 33,474 15,715 19,066 68,255 Disposals (52,886) (12,631) -- (65,517) Gains and losses recognised in profit or loss 33,030 9,621 9,483 52,134 ------------ Closing balance at 31 July 2018 393,539 111,146 124,941 629,626 ------------ Total gains included in income statement for assets held at the end of the period 13,659 7,353 9,483 30,495 ------------ Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary profit or loss profit or loss undertakings Total Six months to 31 July 2017 (unaudited) GBP'000 GBP'000 GBP'000 GBP'000 --------------------------------------------------- ------------------------------------------------------- ----------------------------------------------------- ------------ ---------- Opening balance at 1 February 2017 383,068 108,031 80,718 571,817 Additions 32,149 9,617 6,161 47,927 Disposals (73,884) (9,989) -- (83,873) Gains and losses recognised in profit or loss 28,746 4,704 5,010 38,460 ------------ Closing balance at 31 July 2017 370,079 112,363 91,889 574,331 ------------
Total (losses)/ gains included in income statement for assets held at the end of the period (1,087) 7,356 5,010 11,279 ------------ Notes to the financial statements (unaudited) 7) Fair Values estimation (continued) Unquoted investments (indirect) at fair value through Unquoted investments (direct) at fair value through Subsidiary profit or loss profit or loss undertakings Total Year to 31 January 2018 (audited) GBP'000 GBP'000 GBP'000 GBP'000 ------------------------------------------------------- ------------------------------------------------------- ----------------------------------------------------- ------------ ----------- Opening balance at 1 February 2017 383,068 108,031 80,718 571,817 Additions 81,122 16,853 11,029 109,004 Disposals (128,941) (36,933) -- (165,874) Transfer of instrument to level 1 -- (469) -- (469) Gains and losses recognised in profit or loss 44,672 10,959 4,645 60,276 ------------ Closing balance at 31 January 2018 379,921 98,441 96,392 574,754 ------------ Total (losses)/ gains for the year included in income statement for assets held at the end of the reporting period (53,072) (7,277) 4,645 (55,704) ------------ 1. Related party transactions The investment management charges of GBP3.8m (31 July 2017: GBP3.6m; 31 January 2018: GBP7.2m) were paid to ICG Alternative Investment Limited (the "Manager"). The Manager is a related party. Management fees amounted to 1.11% (31 July 2017: 1.14%; 31 January 2018 1.12%) of the average net assets in the period. The management fee charged by the Manager is unchanged, at 1.4% of the fair value of invested assets and 0.5% of outstanding commitments to funds in their investment period, in both cases excluding funds managed by Graphite Capital Management LLP and ICG. This arrangement ensures management fees are not borne twice in respect of its investments in funds managed by the Manager. No fee is charged on cash or liquid asset balances. The table below sets out the management charges that the Company has borne in respect of its investments in funds managed by the Manager on an arms-length basis. Half year to Half year to Year ended 31 July 31 July 31 January 2018 2017 2018 GBP'000 GBP'000 GBP'000 ------------------------------- ------------ ------------ ---------- ICG Europe Fund V 44 55 100 ICG Europe Fund VI 122 161 234 ICG Europe Fund 2006B 23 26 54 ICG Strategic Secondaries Fund II 155 341 469 ICG Velocity Partners Co-Investor 76 81 143 ICG Asia Pacific III 29 97 272 ICG Recovery Fund 2008B 32 25 59 ICG Cross Border 12 -- -- ICG Europe Fund VII 103 -- -- 596 786 1,331 ------------ ------------ ---------- Notes to the financial statements (unaudited) 1. Related party transactions (continued) Further transactions between the Company and its subsidiaries are shown below: Half year Half year to to Year ended 31 July 31 July 31 January 2018 2017 2018 Subsidiary Nature of transaction GBP'000 GBP'000 GBP'000 --------------------------------- ------------------------------ --------------------- ------- ---------- ICG Enterprise Trust Limited (Decrease)/ increase in Partnership amounts owed to subsidiaries (269) 6,383 7,623 Income allocated 167 1,140 1,205 ICG Enterprise Trust (2) Limited Increase in amounts owed Partnership to subsidiaries 3,505 2,303 11,192 Income allocated 841 1,021 1,719 ICG Enterprise Trust Co - Increase in amounts owed by Investment Limited Partnership subsidiaries 23,831 15,446 30,441 Income allocated 88 8 426 Amounts owed by subsidiaries Amounts owed to subsidiaries 31 July 31 July 31 January 31 July 31 July 31 January 2018 2017 2018 2018 2017 2018 Subsidiary GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 ---------------------------------- ------------- -------------- ------------ ------- ------- ------------ ICG Enterprise Trust Limited Partnership -- -- -- 36,063 35,092 36,332 ICG Enterprise Trust (2) Limited Partnership 39,736 36,939 36,939 20,438 5,247 14,136 ICG Enterprise Trust Co - Investment Limited Partnership 69,263 30,437 45,432 -- -- -- Amounts owed by subsidiaries represent funding provided by the Company to its subsidiaries to allow them to make investments. The balances will be repaid out of proceeds from their portfolios. The value of the subsidiaries is shown net of an accrual for the interests of the co-investors (ICG and certain of its executives, and, in respect of certain historic investments, the executives and connected parties of the Graphite Capital, the former manager) in the co-investment incentive scheme. As at 31 July 2018, GBP24.4m was accrued (31 July 2017:GBP21.6m; 31 January 2018: GBP22.5m), an increase of GBP1.8m in the period. During the half year, co-investors invested GBP0.3m (period to 31 July 2017: GBP0.2m; year to 31 January 2018: GBP0.6m). Payments received by co-investors amounted to GBP2.5m or 2.9% of GBP84.9m of proceeds received in the half year (period to 31 July 2017: GBP3m or 2.5% of GBP117.1m proceeds received; year to 31 January 2018: GBP6.5m or 2.9% of GBP220.6m proceeds received). On 1 August 2018, ICG Europe Fund V exited its investment in Minimax. Concurrently, ICG Europe Fund VI and ICG Europe Fund VII acquired a holding in Minimax of EUR150m and EUR562.5m respectively. The transaction was conducted on an arm's length basis. Statement of Directors' Responsibilities Statement of Directors' Responsibilities The directors confirm that the interim financial statements have been prepared in accordance with IAS 34 'Interim Financial Reporting' as adopted by the European Union and that the business review includes a fair review of the information required by DTR 4.2.7 and DTR 4.2.8, namely: -- an indication of important events that have occurred during the first six months of the financial year and their impact on the interim financial
statements, and a description of the principal risks and uncertainties for the remaining six months of the financial year; and -- material related-party transactions in the first six months of the financial year and any material changes in the related-party transactions described in the last annual report. The directors of ICG Enterprise Trust plc are listed in the ICG Enterprise Trust plc Annual Report & Accounts for the year ended 31 January 2018, with the exception of Peter Dicks who stepped down from the Board at the AGM on 18 June 2018, and Alastair Bruce who was appointed as a Director, following his election at the AGM on 18 June 2018: A list of current directors is maintained on the ICG Enterprise Trust plc website: https://www.globenewswire.com/Tracker?data=-WuRzaKg0PAmwiQQY4Fxm6FjHZDqROVmdkg9J_Uum0upbgwsoWZa7jGsLed1Gc6evMZ8OeyfcfaT_6bFJ6YazzPuhUnWLgya6XfCKfkUYl0qbl8IGrbJoCk1v7ARe828VgvhGNcj6Iiw7zbrLHTQ8zWHWFokwOT0-cWQRAe3N_s= http://www.icg-enterprise.co.uk/about-us/the-board. Going Concern The factors likely to affect the Company's ability to continue as a going concern were set out in the Report and Accounts for the year ended 31 January 2018. As at 31 July 2018, there have been no significant changes to these factors. Having reviewed the Company's forecasts and other relevant evidence, the directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the interim financial statements. On behalf of the Board Jeremy Tigue, Chairman 3 October 2018 Independent review report to ICG Enterprise Trust plc Report on the interim results Our conclusion We have reviewed ICG Enterprise Trust plc's interim results (the "interim financial statements") in the half-yearly financial report of ICG Enterprise Trust plc for the 6 month period ended 31 July 2018. Based on our review, nothing has come to our attention that causes us to believe that the interim financial statements are not prepared, in all material respects, in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. What we have reviewed The interim financial statements comprise: -- the Balance Sheet as at 31 July 2018; -- the Income Statement for the period then ended; -- the Cash Flow Statement for the period then ended; -- the Statement of Changes in Equity for the period then ended; and -- the explanatory notes to the interim financial statements. The interim financial statements included in the half-yearly financial report have been prepared in accordance with International Accounting Standard 34, 'Interim Financial Reporting', as adopted by the European Union and the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. As disclosed in note 3 to the interim financial statements, the financial reporting framework that has been applied in the preparation of the full annual financial statements of the Company is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union. Responsibilities for the interim financial statements and the review Our responsibilities and those of the directors The half-yearly financial report, including the interim financial statements, is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority. Our responsibility is to express a conclusion on the interim financial statements in the half-yearly financial report based on our review. This report, including the conclusion, has been prepared for and only for the company for the purpose of complying with the Disclosure Guidance and Transparency Rules sourcebook of the United Kingdom's Financial Conduct Authority and for no other purpose. We do not, in giving this conclusion, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior consent in writing. What a review of interim financial statements involves We conducted our review in accordance with International Standard on Review Engagements (UK and Ireland) 2410, 'Review of Interim Financial Information Performed by the Independent Auditor of the Entity' issued by the Auditing Practices Board for use in the United Kingdom. A review of interim financial information consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (UK) and, consequently, does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. We have read the other information contained in the half-yearly financial report and considered whether it contains any apparent misstatements or material inconsistencies with the information in the interim financial statements. PricewaterhouseCoopers LLP Chartered Accountants London 3 October 2018 Glossary Term Short Definition form -------------- -------- ---------------------------------------------------------------- Alternative APMs APMs are a term defined by the European Securities Performance and Markets Authority as "financial measures of historical Measures or future performance, financial position, or cash flows, other than a financial measure defined or specified in the applicable financial reporting framework". APMs are used in this report if considered by the Board and the Manager to be the most relevant basis for shareholders in assessing the overall performance of the Company and for comparing the performance of the Company to its peers, taking into account industry practice. Definitions and reconciliations to IFRS measures are provided in the main body of the report or in this Glossary, where appropriate. -------------- -------- ---------------------------------------------------------------- Buyout funds Funds that acquire controlling interests in companies with a view towards later selling those companies or taking them public. -------------- -------- ---------------------------------------------------------------- Compound CAGR Represents the annual growth rate of an investment Annual Growth over a specified period of time longer than one year. Rate -------------- -------- ---------------------------------------------------------------- Carried Equivalent to a performance fee, this represents a interest share of the profits that will accrue to the underlying private equity managers, after achievement of an agreed preferred return. -------------- -------- ---------------------------------------------------------------- Co-investment Investments in a single underlying company alongside a private equity fund. -------------- -------- ---------------------------------------------------------------- Co-investment The estimated value of interests in the co-investment incentive incentive scheme operated by the Company. At both scheme 31 July 2018 and 31 January 2018, the accrual was accrual estimated as the theoretical value of the interests if the Portfolio had been sold at its carrying value at those dates. -------------- -------- ---------------------------------------------------------------- Commitment The amount of capital that each limited partner agrees to contribute to the fund which can be drawn at the discretion of the general partner. -------------- -------- ---------------------------------------------------------------- Direct Investments in a single underlying company. investment -------------- -------- ---------------------------------------------------------------- Discount Arises when the Investment trust shares trade at a discount to NAV. In this circumstance, the price that an investor pays or receives for a share would be less than the value attributable to it by reference to the underlying assets. The discount is the difference between the share price and the NAV, expressed as a percentage of the NAV. For example, if the NAV was 100p and the share price was 90p, the discount would be 10%. -------------- -------- ---------------------------------------------------------------- Drawdowns Amounts invested by the Company into funds when called
by underlying managers in respect of an existing commitment. -------------- -------- ---------------------------------------------------------------- Earnings EBITDA Stands for earnings before interest, tax, depreciation before and amortisation, which is a widely used performance interest, tax, measure in the private equity industry. depreciation and amortisation -------------- -------- ---------------------------------------------------------------- Enterprise EV The aggregate value of a company's entire issued share value capital and net debt. -------------- -------- ---------------------------------------------------------------- FTSE All-Share The change in the level of the FTSE All-Share Index, Index Total assuming that dividends are re-invested on the day return that they are paid. -------------- -------- ---------------------------------------------------------------- Full Exit events (e.g. trade sale, sale by public offering, realisations or sale to a financial buyer) following which the residual exposure to an underlying company is zero or immaterial. -------------- -------- ---------------------------------------------------------------- Funds in Funds which are able to make new platform investments investment under the terms of their fund agreements, usually period up to five years after the initial commitment. -------------- -------- ---------------------------------------------------------------- General GP The entity managing a private equity fund that has Partner been established as a limited partnership. This is commonly referred to as the Manager. -------------- -------- ---------------------------------------------------------------- Hedging An investment technique designed to offset a potential loss on one investment by purchasing a second investment that is expected to perform in the opposite way. -------------- -------- ---------------------------------------------------------------- High Co-investments, ICG managed funds and secondary fund conviction investments. -------------- -------- ---------------------------------------------------------------- Indirect Investments held in a private equity fund structure. investments -------------- -------- ---------------------------------------------------------------- Initial Public IPO An offering by a company of its share capital to the Offering public with a view to seeking an admission of its shares to a recognised stock exchange. -------------- ------ ------------------------------------------------------------------ Internal Rate IRR The annualised rate of return received by an investor of Return in a fund. It is calculated from cash drawn from and returned to the investor together with the residual value of the investment. -------------- ------ ------------------------------------------------------------------ Last Twelve LTM The time frame of the immediately preceding 12 months Months in reference to a financial metric used to evaluate the company's performance. -------------- ------ ------------------------------------------------------------------ Limited LP An institution or individual who commits capital to Partner a private equity fund established as a limited partnership. These funds are generally protected from legal actions and any losses beyond the original investment. -------------- ------ ------------------------------------------------------------------ Limited One or more general partners, who have responsibility Partnership for managing the business of the partnership and have unlimited liability, and one or more limited partners, who do not participate in the operation of the partnership and whose liability is ordinarily capped at their capital and loan contribution to the partnership. In typical fund structures, the general partner receives a priority profit share ahead of distributions to limited partners. -------------- ------ ------------------------------------------------------------------ Management MBI A change of ownership, where an incoming management Buyin team raises financial backing, normally a mix of equity and debt, to acquire a business. -------------- ------ ------------------------------------------------------------------ Management MBO A change of ownership, where the incumbent management Buyout team raises financial backing, normally a mix of equity and debt, to acquire a business it manages. -------------- ------ ------------------------------------------------------------------ Net asset NAV The value of the Company's assets attributable to value per per one Ordinary share. It is calculated by dividing 'shareholders' share share funds' by the total number of Ordinary shares in issue. Shareholders' funds are calculated by deducting current and long-term liabilities, and any provision for liabilities and charges, from the Company's total assets. -------------- ------ ------------------------------------------------------------------ Net asset The change in the Company's net asset value per share, value per assuming that dividends are re-invested at the end share Total of the quarter in which the dividend was paid. Return -------------- ------ ------------------------------------------------------------------ Net debt The total short term and long-term debt in a business, less cash and cash equivalents. -------------- ------ ------------------------------------------------------------------ Net The net amount due; comprised of receivables, assets obligations due from subsidiaries and co-investment incentive scheme accrual. -------------- ------ ------------------------------------------------------------------ Overcommitment Where private equity fund investors make commitments exceeding the amount of cash immediately available for investment. When determining the appropriate level of overcommitment, careful consideration needs to be given to the rate at which commitments might be drawn down, and the rate at which realisations will generate cash from the existing portfolio to fund new investment. -------------- ------ ------------------------------------------------------------------ Portfolio The aggregate of the investment Portfolios of the Company and of its subsidiary limited partnerships. This is consistent with the commentary in previous annual and interim reports. The Board and the Manager consider that this is the most relevant basis for shareholders to assess the overall performance of the Company and comparison with its peers. The closest equivalent amount reported on the balance sheet is "investments at fair value". A reconciliation of these two measures is presented below. -------------- ------ ------------------------------------------------------------------ Receivables Investments Cash held by from Co-investment incentive scheme GBPm per balance sheet subsidiaries subsidiaries accrual Portfolio ----- ------------------ -------------- --------------- ------------------------------ --------- 31 July 2018 631.3 (0.2) (1.0) 24.4 654.5 31 Jan 2018 576.5 -- 1.7 22.5 600.7 Post-crisis Investments completed in 2009 or later. investments ----------- --- --------------------------------------------------------------- Pre-crisis Investments completed in 2008 or before, based on investments the date the original deal was completed, which may differ from when the Company invested if acquired through a secondary. ----------- --- --------------------------------------------------------------- Preferred The preferential rate of return on an individual investment return or a portfolio of investments, which is typically 8% per annum. ----------- --- --------------------------------------------------------------- Premium The share price is higher than the NAV and investors would therefore be paying more than the value attributable to the shares by reference to the underlying assets.
----------- --- --------------------------------------------------------------- Public to P2P The purchase of all of a listed company's shares using private a special-purpose vehicle funded with a mixture of debt and unquoted equity. ----------- --- --------------------------------------------------------------- Quoted Any company whose shares are listed or traded on a company recognised stock exchange. ----------- ----- ------------------------------------------------------------- Realisation Amounts received by the Company in respect of the proceeds Portfolio, which may be in the form of capital proceeds or income such as interest or dividends. ----------- ----- ------------------------------------------------------------- Secondary These occur when a Company purchases existing private investments equity fund interests and commitments from an investor seeking liquidity. ----------- ----- ------------------------------------------------------------- Share price The change in the Company's share price, assuming Total that dividends are re-invested on the day that they Return are paid. ----------- ----- ------------------------------------------------------------- Total A performance measure that assumes the notional re-investment Return of dividends. This is a measure commonly used by the listed private equity sector and listed companies in general. The tables below set out the share price and the net asset value per share growth figures for periods of one, three, five and ten years to the balance sheet date, on both an unadjusted basis (i.e. without dividends re-invested) and on a Total Return basis. ----------- ----- ------------------------------------------------------------- Unadjusted performance in years to 31 July 2018 1 year 3 year 5 year 10 year* ------------- ------------------- ------------- --------- ---------- Net asset value per share +9.5% +46.5% +50.4% +97.1% Share price +14.4% +44.4% +74.2% +102.9% FTSE All-Share Index +5.1% +16.4% +21.2% +48.9% Total return performance in years to 31 July 2018 1 year 3 year 5 year 10 year* ------------- ----------- -------------- ------------ -------------- Net asset value per share +11.9% +55.4% +66.8% +126.4% Share price +17.3% +55.4% +97.3% +142.2% FTSE All-Share Index +9.2% +30.2% +44.9% +113.9% * As the Company changed its year end in 2010, the ten year figures are for the 121 month period to 31 July 2018. Underlying The change in the valuation of the Company's Portfolio, valuation before the effect of currency movements. movement ---------------- ---------------------------------------------------------- Undrawn Commitments that have not yet been drawn down (see commitments definition of drawdowns). ---------------- ---------------------------------------------------------- Unquoted company Any company whose shares are not listed or traded on a recognised stock exchange. ---------------- ---------------------------------------------------------- Uplift on exit The increase in gross value relative to the underlying manager's most recent valuation prior to the announcement of the disposal. Excludes a small number of investments that were public throughout the life of the investment. May differ from valuation gains in the reporting period in certain instances due to timing differences. ---------------- ---------------------------------------------------------- Valuation Earnings or revenue multiples applied in valuing a multiples business enterprise. ---------------- ---------------------------------------------------------- Venture capital Investing in companies at a point in that company's life cycle that is either at the concept, start-up or early stage of development. ---------------- ---------------------------------------------------------- (1) Last 12 months. (2) As the Company changed its year end in 2010, the ten-year figures are for the 121-month period to 31 July 2018. (3) Refer to Financials section on highlights page for comparative information. (4) Including reinvested dividends paid in March 2018 and July 2018 totalling 11p. Please refer to the Glossary for definition of Total Return. (5) Refer to Financials section on highlights page for comparative information. (6) Uplift figure excludes publically listed companies that were exited via sell downs of their shares. (7) Average return from full exits on a primary investment basis, weighted by cost. (8) Refer to supplementary information at the end of this review for breakdown of new commitments during the six months to 31 July 2018. (9) Refer to supplementary information at the end of this review for comparative information.
(END) Dow Jones Newswires
October 04, 2018 02:00 ET (06:00 GMT)
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